Key Euribor rate edges down as ECB paybacks approach

FRANKFURT, Dec 17 (BestGrowthStock) – Key euro-priced bank-to-bank
lending rates ticked down on Friday as excess liquidity
continued to build in the run up to key ECB payback deadlines
and the typically tense end-of-year period in money markets.

The three-month Euribor rate (EURIBOR3MD=: ) — traditionally
the main gauge of unsecured interbank euro lending and a mix of
interest rate expectations and banks’ appetite for lending —
fell to 1.023 percent from 1.024 percent.

Shorter-term one-week rates (EURIBORSWD=: ) also dropped, to
0.613 percent from 0.624 percent.

Six-month rates (EURIBOR6MD=: ) remained flat at 1.254
percent, while longer-term 12-month rates (EURIBOR1YD=: ) were
also unchanged at 1.533 percent.

Overnight rates (EONIA=: ) fixes at 0.453 percent on Thursday.

Bank-to-bank 3-month lending rates traditionally sit just
above the ECB’s headline rate, but the ECB’s tactic of lending
out unlimited cash during the financial crisis had long kept
them well below the benchmark rate.

The 3-month Euribor rate broke above the European Central
Bank’s 1.0 percent benchmark rate for the first time in well
over a year in October, marking a milestone in money markets
return to normality. [ID:nLDE68T13O][ID:nECB000002]

By the start of next year, markets will almost be back to
the pre-crisis range of ECB funding on offer. The bank’s
three-month operations will again be the longest maturity on
offer, although banks will still have the security of unlimited
access to funds as well the extra option of 1-month funding.

In the run-up to the latest repayment, excess liquidity in
money markets has climbed to over 90 billion euros, the highest
level since the last major ECB deadline in late September.

The ECB threw out original plans to continue with its exit
from crisis support measures earlier this month, deciding to
continue to provide unrestricted funding to money markets until
at least mid-April. [ID:nLDE6B10EI]

It also kept interest rates on hold at a record low of 1
percent as expected. Economists currently expect the bank to
keep them there until the fourth quarter of next year.

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For graphic of EONIA trading volumes click
http://graphics.thomsonreuters.com/F/08/EZ_EONIA0810.gif

For graphic of euro zone liquidity levels click
http://r.reuters.com/wum27q
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Euribor rates are fixed daily by the Banking Federation of
the European Union (FBE) shortly after 1000 GMT.

* For a table of the latest Euribor fixings for terms of one
week to one year, double click on (EURIBOR=: )

* For a table of the previous day’s fixings of EONIA swap
rates, which show market expectations for future overnight
lending rates, double click on (EONIAINDEX: )

* For graphs of historic Euribor and EONIA swap rates, right
click on the links in angle brackets below, and select ‘Related
Graph’
1 week (EURIBORSWD=: ) (EONIAINDEXSW=: )
2 week (EURIBOR2WD=: ) (EONIAINDEX2W=: )
3 week (EURIBOR3WD=: ) (EONIAINDEX3W=: )
1 month (EURIBOR1MD=: ) (EONIAINDEX1M=: )
2 month (EURIBOR2MD=: ) (EONIAINDEX2M=: )
3 month (EURIBOR3MD=: ) (EONIAINDEX3M=: )
4 month (EURIBOR4MD=: ) (EONIAINDEX4M=: )
5 month (EURIBOR5MD=: ) (EONIAINDEX5M=: )
6 month (EURIBOR6MD=: ) (EONIAINDEX6M=: )
7 month (EURIBOR7MD=: ) (EONIAINDEX7M=: )
8 month (EURIBORS8M=: ) (EONIAINDEX8M=: )
9 month (EURIBOR9MD=: ) (EONIAINDEX9M=: )
10 month (EURIBOR10MD=: ) (EONIAINDEX10M=: )
11 month (EURIBOR11MD=: ) (EONIAINDEX11M=: )
1 year (EURIBOR1YD=: ) (EONIAINDEX1Y=: )
(Reporting by Frankfurt newsroom; Editing by Patrick Graham)

Key Euribor rate edges down as ECB paybacks approach